The US (and global) economies are in sharp decline after a period of growth that was largely fueled by speculative (and fraudulent) loans that increased money supply way too quickly. While carnage is wide reaching offline, it is simply a phenomena that has not really touched our publishing business.

The Illusion of Safety

There is an illusion that if something is physical that it has a sense of permanence to it, but this year the US government has had to bail out banks, automakers, insurance companies, and credit cards. Residential real estate has dropped hard and commercial real estate is also in the hurt locker (if retail is off 10% in some areas then many businesses operating on a 5% margin will go bankrupt - leading to vacancies and lower prices).

Much of the residential real estate decline is simply due to excessive capacity and various flavors of mortgage fraud (appraisal fraud, loan application fraud, principal-agent problems, malfeasant regulation, etc.), but the commercial real estate slowdown is due to the residential slowdown, global economic slowdown, and the existence of better and cheaper alternatives - namely onlineretail.

Investing in Growth

The Tribune Company recently filed for bankruptcy and the New York Times is reporting dropping ad revenues. Amongst the carnage Amazon.com reported record numbers. In a lot of ways some of the offline decay is just a shift toward more efficient online business models.

I had breakfast last week with a person who has been in retailing for more than 30 years and has been operating at the highest levels of the industry. He said that he expects every category to be winnowed down to one dominant retailer with all the others going by the wayside. This too has the internet as an underlying cause. comScore says that online holiday shopping this year has been flat with the year before and I've seen reports that offline retail is down 6-10pcnt. The fact is that consumers have finally come to the realization that shopping online is easier, cheaper, and often a better experience. Physical retail will survive, but it will be a smaller industry in the next decade and those that do survive will need to give consumers a very strong rationale to get in the car and come to their store.

Search is the Primary Growth Engine of the Web

Not only is the web growing during the downturn, but much of the online growth is driven by marketing and search. SEO exist as the intersection of those two points, and SEOs that approach the topic from a holistic marketing standpoint have a significant advantage at building distribution and growing capital. Give me an average passionate player, add SEO, and I can help them rank #1 in most markets.

When you back out inflation and opportunity cost, professional investors are lucky to gain 5% a year. With smart market research and effective SEO implementation many businesses can outpace that by a factor of over 400! Being in SEO today would be like being in coal, oil, or railroads in years past...you help connect supply and demand.

Trimming Profit Margins

Outperforming the market by hundreds or thousands of percent presents an opportunity that will draw lots of competition - and one that will not last long if not evolved. Scraping raw data is getting easier. Why should people chose to work with you (and vote for you)?

If you get a #1 ranking which provides amazing profit margins it is best to look for ways to thicken out the site even if those strategies lower short-term profit margins. Search algorithms will change, and the thicker and more interactive your site is the more sustainable your rankings will be.

Additional expenses can be offset by refining conversion process to increase visitor value and lifetime customer value, and lower forward marketing costs as you leverage the additional earned exposure.

Another thing to consider is the use of advertising to build other quality signals. Awareness leads to conversion. And if you can get advertising to pay for itself and gain other signals of quality as a side effect of user interaction with your site then you will end out ahead in the long run. I love recycling dollars because it costs nothing, builds free credit card points, and builds up a website's online footprint in a Google friendly way.

Making Online Businesses More Sustainable than Offline Businesses

If much of your online revenues revolve around a thin SEO centric approach then it helps to create at least 1 or 2 aggressively branded sites that hedge against the risks algorithm shifts present. The net effect of building a brand is that you are not overly-reliant on any search engine or any physical market. If people talk about you and recommend you then you win. This site has members from dozens of countries all over the world, so even if the US Dollar collapsed we would still have a diverse income stream.

Helping Others

Once you are doing really well you can give back in a variety of ways - donate money to charities, donate services to charities, and/or give income-producing websites to family members. You can give away featured content and tools that help others knowing that in the end it will also come back to help build your business. You can also pour thousands of dollars into building non-profit sites that may also be able to pay you back in exposure, credibility, and link equity.

Really happy to know online businesses r growing since they r providing better value to consumers. Being in SEO at this point feels really nice. I like the holistic approach you have applied n talk about...........it opens tons of opportunities n fields for SEO's to work in. In the beginning i used to wonder Aaron gives away so much free info on SEO, isn't he making SEO more competitive...........but here i see more n more space for SEO's with the holistic approach. This gives SEO's the birds eye's view of the whole online business scenario and adds value to SEO as a profession and takes it beyond buying of PR 8 .gov links :)

Awesome post Aaron! I am in full agreement about approaching SEO/IM from a holistic standpoint. With all of the changes that Google is implementing (Search Wiki, universal search, personalization) I sometimes wonder if SEO in the long run (like > 5years) might slowly die away, and other aspects of IM will grow stronger and take its place. With your experience do you see this as a possible reality?

As an SEM service provider (I know, I know - I shouldn't be), I've found it increasingly easy to point out to clients the benefits of moving marketing budgets into search. The ability to track your results and refine for a stronger ROI without losing your shirt in the up-front investment is huge. In 2009 we're going to see many more businesses moving their budgets into search - especially the organic side.

And I'll be working towards diversifying my own revenue streams and acquiring web assets rather than being a clock watcher...

great post Aaron, and I agree: as SEOs, we are in a great place right now. I also think your insight on offering content for free (at first) is spot-on, and a crucial element of online marketing many fail to get...which is why you do well while others may struggle. Couple this post with your observation of "garbitrage" on the rise, and organic SEO has never been a sexier place to be. Except maybe back 5-6 years ago, when you could simply pad some meta tags to rank!
Happiest of holidays to you and yours - looking forward to a(nother) great year. Thanks for all you give to us -

"I enjoy the fact that you give back so much to the community. Through the "lead by example model" Jeffrey Smith

I agree with Jeffrey, you give a lot to the Community, with this type of posts you open the horizon of your readers: Holistic SEO, what a great concept, thanks. A sincere Happy New Year for you and your family, lots of success in 2009.

I like your last paragraph "Helping Others" . They are many successful online business enterprise only concern on earning more money but forgot to bear social responsibility and do not willing to donate to those who need help. I run a small SEO company in Malaysia and my company donate RM500 (USD 140) every month to the charities. Although it is not a big amount, but at least I think that i contribute something to those who need help

I believe karma : If you help others, the others will come to help you in other form. :)

Aaron -- great article! We are indeed lucky to be in this field, and I am exceedingly grateful for the hand I've been dealt so far.

One of my strategies for project websites that I manage is to provide freebies. This not only creates a temptation for the people on the site; invariably, someone will recommend to someone else to go check it out. It won't help if it's not good stuff -- don't try to be like CrackerJack (Ever notice their prizes have gotten increasingly cheap and useless in recent years?). My buzz-word for all my projects is to make content, links, images, etc 'compelling'. Freebies are, IMHO, key.

Giving back to the community is an excellent idea. One of my websites could potentially help with that.

Again -- thanks, Aaron! I'm learning so much from you and everyone on here!